Creditors of ailing department store chain Debenhams have backed a restructuring plan, which will eventually lead to the closure of around 50 stores and rent reductions on others.
More than 75% of Landlords and other creditors voted in favour of the Company Voluntary Arrangement (CVA) plan, which was announced last month. The first stage of the programme will see the closure of 22 of its 166 stores in the UK next year, impacting around 1,200 jobs. Further store closures are expected to be confirmed in due course, with the final number being dependent on the chain’s future trading performance and discussions with its landlords.
The announcement came hours after it emerged administrators had rejected all takeover bids for the struggling retailer as they were not “at the level required to be taken forward”. As a result, Debenhams will remain owned by Celine, a consortium of its lenders which took control last month after Mike Ashley’s Sports Direct made several failed approaches to buy the business.
Debenhams’ Executive Chairman Terry Duddy said: “I am grateful to our suppliers, our pension stakeholders and our landlords who have overwhelmingly backed our store restructuring plans.
“We will continue to work to preserve as many stores and jobs as possible through this process. This is a further important step to give us the platform to deliver a turnaround.”
Celine’s chief risk officer Stefaan Vansteenkiste stressed the investor consortium was a “committed long-term owner” with it pumping £200m in fresh funding into Debenhams “for the financial restructuring process and to fund the company’s operating turnaround”.
He added: “Within the consortium, there is extensive turnaround experience, which we will deploy to support the management’s plan and to position Debenhams for a long-term successful future.”
